Strength and Stability - SNL Financial

A Message to Shareholders
In looking back at 2008, the most amazing thing
about the past year is not the unprecedented progress that
we made as a company…it is the fact that our accomplishments
in 2008 are just the beginning. During a time
of historic economic challenges, First Commonwealth
remained true to its community banking heritage and ultimately
reaped the rewards of this unwavering commitment
to our customers and our values. While we have not been
immune to the volatility and disruptions that our markets
have experienced, as other banks and financial institutions
struggled, we grew and positioned First Commonwealth
for future growth for years to come.
2008 saw our consumer households grow while the
overall population in the markets we serve declined. Our
focus on doing what is right for our customers enabled us
to take a larger share of a shrinking market. But our growth
was not confined to the retail portion of our business. Our
commercial households grew significantly as well. While
many banks found themselves unable to meet the market’s
needs for a variety of reasons, our commercial loans grew by
$712 million without sacrificing credit quality.
Sound, prudent lending decisions have allowed us to
take advantage of a tremendous opportunity in the midst
of widespread economic uncertainty. First Commonwealth
made the most of this opportunity by developing new
relationships with solid, credit-worthy consumers and
businesses. We also deepened the existing relationships we
had with our current clients. The result of this effort was
that First Commonwealth increased our core net income
by 12.9% during the toughest financial times in decades.
Our company is safe. Our way of doing business is timetested
and sound. Our relationships with our clients are
stronger than ever, and we are building a foundation for
long-term and sustainable growth.
First Commonwealth proved it was one of the few
financial institutions able to successfully execute a public
common stock offering in an incredibly challenging
capital market environment during the fourth quarter.
Our ability to raise more than $100 million through
a public offering of common stock demonstrated the
confidence that investors have in our ongoing progress
and our opportunities for future growth. As a result of
this capital raise, we did not apply for funds through the
Capital Purchase Program, which is part of the federal
Our relationships with our
clients are stronger than
ever, and we are building a
foundation for long-term
and sustainable growth.
government’s Troubled Asset Relief Program (TARP). Our
shareholders, our customers and our employees can take
great comfort in knowing that First Commonwealth is on
the right track.
The performance of First Commonwealth’s stock during
2008 was strong, with the total return to our shareholders
over 23%. The indices that include First Commonwealth
all had negative returns in 2008. These include the S&P
Small Cap 6000, Russell 2000 and the KBW Regional
Banking indices. The Dow Jones Industrial Average
declined by 4,488 points over the same period.
As I mentioned before, what we accomplished in
2008 was just the beginning. Although 2009 will
2 First Commonwealth Financial Corporation